Cuts deepen crisis of the dole queues

 

Britain faces "five more years of pain" on unemployment, with the North-South divide widening further than ever as government cuts bite.

That was the bleak prediction of forecasters at the Centre for Economic and Business Research (CEBR) in a report on the labour market predicting joblessness in many regions hitting levels not seen since the early 1990s recession under John Major.

The CEBR is braced for rising joblessness across every region until 2016 – except in the South-east, East and London. The worst-hit regions will be those most reliant on public-sector jobs as deficit cuts come to bear, the survey indicates. In the North-east, which has the biggest exposure to the cuts, one in eight people could be out of work in four years' time as the jobless rate hits a 20-year high of 13 per cent.

Scotland and Wales, both big state employers, are also in the firing line. In Northern Ireland, where almost three in 10 are employed by the state, the jobless rate could hit a high of 10.7 per cent, the worst since the 1990s recession. Across the UK unemployment will rise from 8.7 per cent this year to 9.2 per cent in 2016.

The figures come as the independent Office for Budget Responsibility predicts 730,000 job cuts in the public sector over the six years to 2017 – although it expects overall employment to rise by one million during the period thanks to a recovering private sector.

The CEBR has a far bleaker view on the jobs market overall with unemployment of 9.2 per cent forecasted by 2016 – well ahead of the 6.3 per cent pencilled in by the OBR.

The economist Rob Harbron said: "The outlook is tough for UK households, particularly those in places with a high dependency on public-sector employment. Family budgets are being squeezed between the pressures of rising unemployment, low earnings growth and stubbornly high inflation."

The picture in the North contrasts with a far more buoyant picture down south as confidence in the South-east is boosted by the fastest growth of any region in the UK, according to the CEBR. The South-east's lowest dependency on the public sector also shields workers from the worst of government budget cuts, leaving unemployment at 5.6 per cent in 2016, the lowest of any region and well below the national average.

George Osborne yesterday said the Government would not waver in its austerity programme, even claiming that the electorate remained firmly supportive. "The national mood is now very much behind the deficit plan,"the Chancellor told the BBC's Andrew Marr Show.

Mr Osborne attempted to diffuse the rising feeling that Europeans were becoming sick of austerity, hence the strong showing of French socialist Francois Hollande. The Chancellor claimed Mr Hollande, who wants to renegotiate the European agreement on cuts, was pro-austerity.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee